Chicago, IL, April 18, 2016 – Nielsen and CGA Strategy, through their Nielsen CGA joint venture, released today the first ever fully projected on-premise measure for the U.S. beverage alcohol market. This first U.S. market report by Nielsen CGA takes a side by side look at the state of the U.S. beverage alcohol market compared to Great Britain, a market in which full measurement has been available for 10 years. Great Britain is a gateway for U.S. on-premise retailers and drinks businesses into Europe, given the similarities between the two regions. The insights from this report highlights opportunities both domestically and internationally.

“This information aims to create a new industry standard by offering brand owners in the U.S. the same comprehensive view of the on-premise marketplace enjoyed by Nielsen CGA’s clients in Great Britain,” said Jon Collins, President Nielsen CGA. “For beverage alcohol suppliers, distributors, and retailers, this enhanced view of the on-premise market will highlight new opportunities, based on projectable data, revealing trends at a category, segment, and brand level.”

Nielsen CGA’s best in class on-premise data and insight is founded on a methodology refined over 25 years to incorporate multiple disparate data feeds, a world-class coding function, and a highly sophisticated multi-stage validation process with inputs covering the majority of beer and spirits sold in the U.S. on-premise.

A tale of two countries

Nielsen CGA’s On-Premise Measurement Program will not only allow for a comparison to Nielsen’s off-premise measurements, but also between the U.S. and Great Britain. While there are a number of similarities within the on-premise between the two countries, it is the differences that can support the identification of opportunities both in the U.S. and Great Britain.

At a headline level, we see volume growth in spirits in both markets and a decline for beer. One major factor here is the change in the nature of the on premise market itself, as traditionally beer-led venues such as the U.S. neighborhood bar and British pub continue to close. There is a six-fold differential in spirit volumes between the U.S. and Great Britain, driven by both the larger serving size and more established cocktail culture in the U.S. Within spirits, vodka has the largest volume share in both markets, with tequila and rum also performing well. Differences are apparent when we consider two iconic categories: the performance of Bourbon drives the U.S. to outperform in Whiskey; while the quintessentially British spirit, Gin, is significantly stronger in Great Britain. Beyond spirits, could a cultural exchange be in order given the respective positions of craft beer and cider? British craft has a long way to go to match its U.S. counterparts; while cider in the U.S. could see further significant growth if the U.K. is any guide.

Comparing the Nielsen CGA on-premise data for each market we can see that:

Spirits

• U.S. on-premise volume growth is outperforming Great Britain in spirits (+3.6% v. +1.3%) with a slightly poorer trend in beer (-3.8% vs. -3.1%).
• The U.S.’s reputation as a strong spirits market is borne out in both trend and quantum.
• In the U.S., total spirts volumes are more than six times those of Great Britain in a market that is 2.5 times the size in terms of number of outlets (233, 000 vs. 120, 000 outlets) with 4.6 times the legal drinking age population.
• The gap in spirits volumes is in part due to American generosity over British reserve as the typical serve in the U.S. (1.5 fl oz) is almost double the size of its Great Britain counterpart (0.85 fl oz).
• Vodka is the number one spirits category across both markets, U.S. 29% share of spirits (GB 33%).
• Whisky/Whiskey in the U.S. share of spirits is far higher than Great Britain (26% vs. 17%), with strong growth of 4.8% in U.S. vs -1.1% decline in Great Britain.
• Tequila has five times the share of spirits in U.S. (11%) compared to Great Britain (2%), although strong growth rates exist in both markets (9.9% in U.S. vs 8% in Great Britain).
• Gin, particularly premium gins, continue to grow in Great Britain at 13.6%, compared to the U.S. where gin is declining 2.2%.
• Rum has a similar share of spirits in U.S. (12%) and Great Britain (10%) and demonstrates growth in both countries, although growth is slower in the U.S. than in Great Britain (+2.4% v +6.0% respectively).
• Further opportunities may exists in the U.S. for large Great Britain categories yet to achieve full potential with American consumers.

Beer

• Both U.S. and Great Britain are seeing long-term declines in the number of beer-led premises such as the neighborhood bar and local pub, and is one factor behind the beer struggles in both markets (U.S. -3.8%; Great Britain -3.1%).
• Britain’s love of beer means that, despite the U.S. on-premise drawing on 4.6 times the legal drinking age population, Great Britain consumers drink one beer for every two consumed in the U.S.
• Craft and cider markets present opportunities for producers to learn and potentially export.
• A more mature U.S. craft segment has a greater share (31%) but slower growth (1%) suggesting an opportunity to export into the U.K. market hungry for innovation.
• Great Britain’s craft category looks to be a few years behind its U.S. counterpart, demonstrating significant growth (+40.0%) but with just 4% share of the beer category.
• Conversely, the Great Britain figures would suggest there is headroom for cider in the U.S. on premise. Great Britain cider has 12.3% share of beer and cider and is growing at 0.9%, while U.S. cider has 1.8% share of beer and cider and is growing at 5.4%.

Note

All numbers are taken from Nielsen CGA on-premise data and represent unit volume performance for U.S. to Jan. 30, 2016 and GB to Jan. 23, 2016.

About Nielsen

Nielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a comprehensive understanding of what consumers watch and buy. Nielsen’s Watch segment provides media and advertising clients with Total Audience measurement services for all devices on which content — video, audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and retailers the industry’s only global view of retail performance measurement. By integrating information from its Watch and Buy segments and other data sources, Nielsen also provides its clients with analytics that help improve performance.  Nielsen, an S&P 500 company, has operations in over 100 countries, covering more than 90% of the world’s population. For more information, visit nielseniq.com.

About CGA

CGA Strategy is an innovative, flexible and creative marketing information company specialising in the on premise market. Through a product portfolio covering brand metrics, outlet universe evolution and retailer performance, CGA provides clients with solutions to their individual business needs. Established in 1990, CGA Strategy now works with producers, retailers and regulators in multiple countries across Europe and North America. For more information, please visit, www.cgastrategy.co.uk.

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